Food-Away-from-Home Expenditure in Mexico during the COVID-19 Pandemic: A Micro-Econometric Analysis

Abstract

The propagation of the coronavirus disease 2019 (COVID-19) reshaped the relationship between income and food-away-from-home (FAFH) expenditure in Mexico during 2020. Although the number of households participating in this market fell across income deciles and regions due to the pandemic, the impact on their budget shares is not uniform. Using data from the Encuesta Nacional de Ingresos y Gastos de los Hogares (ENIGH) 2020, we estimated an Engel curve of the Working-Lesser functional form for FAFH. Among the independent variables are the number of family members 65 years of age and older, and dummies to indicate whether the household experienced food insecurity or received remittances. The estimation was carried out following the Heckman two-step method, suitable for censored-response data. The results suggest that the budget share for FAFH drops as income increases. The number of older adults and food insecurity discourage the decision to participate in FAFH expenditure and increase its budget share, whereas remittances encourage participation and reduce its budget share. The corrected conditional elasticity is 0.4609; the sign and the magnitude indicate that FAFH is a necessity good.